Monday, June 23, 2008

Ashot Poghosian seeks to reshape the market for meat products in KarabakhA former New Yorker is building his Armenian dreamby Emil Sanamyan

OUTSIDE NORAGYUKH, Karabakh – “Every Armenian must imagine living in the homeland,” exclaims Ashot Poghosian as he showcases the progress that has been made on the sprawling farm ten miles north of Stepanakert that he purchased recently.

Until earlier this year Mr. Poghosian ran a successful construction services company with a $1.5 million annual turnover in Bayside, N.Y. Now he is the owner and chiefexecutive of Poghosian Gerdastan, a company he is building with pioneering zeal and Western efficiency, and was only eager to describe in minute detail during a visit by the Armenian Reporter on July 23.

Mr. Poghosian is in the process of building one of the largest Armenian producers of meat products, while helping make his home in Armenian Karabakh.

Long journey home

This energetic 53-year-old Yerevan native and father of five is completing an unusually circuitous journey back to the homeland. Having earned an economics degree from Yerevan State University in the 1970s, Mr. Poghosian decided to move to Moscow, he says, to get away from corruption pervading Soviet Armenia.

After working for 14 years in Moscow, dealing with production of everything from shoes to construction materials, Mr. Poghosian immigrated to the United Statesjust as the Soviet Union unraveled.

“I knew only three words of English at the time,” he recalls. But that did not stop the then 40-year-old from teaching himself the language and qualifying for a real-estate license. “Pretty soon I was selling more homes than my Americanborn colleagues.”

After earning enough start-up capital, Mr. Poghosian launched his own business, which provided services to the New York City Housing Authority. But he was not satisfied with becoming another American success story.

“I always thought about moving back to Armenia. While still living in Moscow I befriended the former senior Soviet diplomat, the now deceased Ashot Melik-Shahnazarov. After Armenia became independent, he moved to Yerevan to help establish the Foreign Ministry.

“And those were the difficult years. He became an inspiration for me,” Mr. Poghosian says.

The first-ever visit to Karabakh for Mr. Poghosian happened just three years ago, when he helped deliver a consignment of computers to be donated to schools here.

“I soon realized, however, that I could have the most direct impact by moving here rather than providing aid from the distance. I realized that I must be and live here and the time to do it was now.”

Building a modern company from the ground up

“So, I began looking for opportunities here. Karabakh has always been primarily agricultural, but it still produces very few food products that could be successfully exported. And although I had no previous farming or agribusiness experience, over the years I have learned the formula for a successful business.”

Three years ago, Mr. Poghosian purchased Sunzhnika – a Soviet-era farm complex surrounded by rolling green hills just off the recently built Stepanakert-Mardakerthighway.

The facility includes sixteen buildings spread over nine hectares of land. It was used to breed pigs and sell pork until state funding dried up in the early 1990s.

“When I first came here, the site was in a dreadful shape with weeds growing around and inside the buildings,” Mr. Poghosian says. He began by hiring several locals to clean up the site and repair the buildings, launching his own roofing metal production in the process.

“We now have 24-hour electricity, natural gas, artesian water, and Internet. All the necessary production equipment we imported from the U.S. and Europe. In addition to 28 local staff, I employed a very experienced engineer with whom I worked in Moscow and a young economist from Yerevan.

“We have construction work left to do, but right now I am focusing on completing my own house since my family is due to move here next month.”

His wife, mother, and two teenage sons are now looking for airplane tickets.

Casting distortions and doubts aside

Mr. Poghosian’s investments so far have amounted to over $1.7 million. While a number of diasporans and non-Armenians have launched successful businesses in Karabakh on this scale or larger, few have moved here permanently so far.

Mr. Poghosian says that among his acquaintances in New York’s Armenian community there was little excitement or even encouragement over his family’s decision to move,with people referring to others’ failures to adapt in Armenia and particularly wary of his choice to live in Karabakh.

“Information about Karabakh is often distorted by Armenians abroad,” Mr. Poghosian argues with some irritation. “When I was recruiting my chief engineer, a non-Armenian then living in Ukraine, his Karabakh-born acquaintances told him it was dangerous to come here. These people are either out of touch with reality or just feel guilty living away from home.

“Your homeland is like your parents – can you abandon them if they are in need or ailing?”

Doing business in Armenian Karabakh

It is not like Armenia and Karabakh are not facing daunting challenges. “The biggest issue for us is finding qualified hard-working people to hire,” says Mr. Poghosian.

“With war and years of foreign assistance, the pool of people with necessary skills and even the desire to work hard to make a living has shrunk.” Many also prefer well-paid military service to farming.

So Mr. Poghosian is casting a wider net, recruiting workers from around Karabakh.

“Here is a dormitory we are building for workers from more distant villages, so they would not have to come far on workdays.” He describes designs for rooms equipped withbathrooms, kitchens, and laundry machines.

The current plan is to launch first production by the end of 2007. The products would include hard salami, basturma, and sujukh, as well as canned meats – things that could survive an export trip to stores in Russia and farther away in Europe and the United States.

Launching production would involve placing the equipment in buildings as renovations on them are done by this fall and buying the necessary number of livestock from farmers.

“The equipment we bought can process 20 cows or 40 pigs an hour. With that capacity we could slaughter all the cows in Karabakh in a couple of years,” Mr. Poghosian jokes as he paces around the farm chain-smoking King Arthur cigars.

According to official statistics there are only about 10,000 heads of cattle in Karabakh.

Part of Mr. Poghosian’s success formula is based on making it more profitable for local farmers to raise both the number and quality of their livestock. Right now there are few such incentives since the small local market has only limited demand for meat.

And making a life in the homeland

“So far, I have not really begun doing business here,” Mr. Poghosian admits. “In New York I could easily see a 150 percent return within a year.

“By the end of the year my investments are likely to total $3 million, and possibly more since the exchange rate of the U.S. dollar is continuing to fall here. And since I am not that rich I will need to see a substantial return next year to make this business sustainable and successful in the long-term.”

Certainly, this is not just another business opportunity for Mr. Poghosian.

“Our compatriots have for centuries longed for the return of our ancestral lands and an independent Armenian state. Let me remind everyone, it is finally here!”

With infectious enthusiasm, Mr. Poghosian calls on his fellow Armenians in the diaspora to set aside the usual set of complaints about living and working in Armenia and capitalize on the historic opportunity: